Dive Brief:
- JBS USA will acquire Plumrose USA, a subsidiary of Danish Crown A/S, for approximately $230 million, according to Food Business News. Plumrose has annual revenues of $500 million.
- As part of the deal, JBS will take over operations at two processing plants in Iowa, one in Mississippi, one in Vermont and one in Indiana.
- The JBS portfolio will expand into prepared foods and value-added categories with Plumrose’s selection of products, including bacon, deli meats, hams and cooked ribs.
Dive Insight:
It was only about five months ago when JBS failed in its attempt to restructure the company, with the strategy struck down by a shareholder veto. This latest deal shows executives aren’t letting that misstep impede the company’s desire to grow. In recent years, the company has expanded its presence in key global markets, including the U.S., Australia, Brazil and Europe — making it a major challenger to Tyson Foods and Hormel Foods.
The Brazilian meat giant remains a leading global meat processor. With its North American arm entering new areas of prepared foods and value-added categories following this acquisition, JBS is moving into categories that enable it to stay more relevant with today’s meat consumers.
Andre Nogueira, chief executive officer of JBS USA Food Co., said the move demonstrates its commitment to “disciplined growth through strategic acquisitions that further diversify our product portfolio, expand our branded offerings and strengthen our direct relationship with consumers.”
A report from the Rabobank Food & Agribusiness Research and Advisory group last year showed that in 2015 meat consumption posted its largest per capita increase in 40 years. Furthermore, the USDA reported in 2016 that beef consumption was on the rise for the first time since 2006, with an expected half-pound increase from the prior year.
Those numbers are promising to the meat industry that has been challenged by the rise of plant-based proteins threatening to upend its dominance. Still, despite these challenges meat is unlikely to see plant proteins overtake those from an animals for a host of reasons, including concerns that plants don't always offer the same complete proteins or bioavailability that animals do. In addition, a recent FarmEcon study found that even if the world used all its cropland to feed livestock, the industry could still not meet meat demand by 2050.